Rocket Companies has announced its second acquisition in as many weeks. The Michigan-based company is buying Mr. Cooper, one of the largest non-bank mortgage servicers and mortgage lenders in the US. The deal is expected to close in an all-stock transaction of $9.4 billion in equity value, based on an 11.0x exchange ratio.
Mr. Cooper, which demoed its mobile app at FinovateSpring 2018, was founded in 1994 to challenge the conventional mortgage experience to bring borrowers a better, more straightforward home buying process. With 9,000 employees, the Texas-based company serves more than six million homeowners with its refinancing and mortgage products.
“Mr. Cooper has been on a journey to transform the homeownership experience, and we have built the most advanced servicing platform in the mortgage industry,” said Mr. Cooper Group Chairman and CEO Jay Bray. “By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care. I am deeply grateful for the dedication of the Mr. Cooper team and look forward to our continued work as we lead our industry into the future of homeownership.”
Once finalized, Rocket Companies and Mr. Cooper will serve a combined 10 million clients with a servicing book of $2.1 trillion, which represents one in six mortgages in America. Rocket will leverage the acquisition to bring its mortgage recapture capabilities to this new, enlarged client base. This will help produce higher loan volume, drive long-term client relationships, and provide greater recurring revenue while lowering client acquisition costs.
Holding a significantly larger servicing portfolio will help Rocket sustain its retention and 83% recapture rate. And by attaching Rocket’s title, closing, and appraisal services to Mr. Cooper’s existing originations, Rocket anticipates it will generate $100 million in additional pre-tax revenue, as well as an extra $400 million in savings from streamlining operations, expense, and technology investments.
When the deal is complete, Mr. Cooper Group’s Chairman and CEO Jay Bray will become President and CEO of Rocket Mortgage, while Dan Gilbert will remain Chairman of Rocket Companies. The company’s board will consist of 11 members, nine from Rocket’s board and two from Mr. Cooper’s.
“Servicing is a critical pillar of homeownership—alongside home search and mortgage origination,” said Rocket CEO Varun Krishna. “With the right data and AI infrastructure we will deliver the right products at the right time. That’s how we build lifelong relationships, by proactively unlocking benefits and meeting needs before they arise. We look forward to welcoming Mr. Cooper’s nearly 7 million clients.”
Today’s announcement comes just two weeks after Rocket unveiled plans to acquire real estate brokerage website Redfin for $1.75 billion. Together, the two deals fuel Rocket’s vision of owning the entire homeownership journey—from search to close and beyond.
With Redfin, Rocket gains a home search platform and a network of real estate agents; with Mr. Cooper, it secures a large servicing portfolio and deep operational infrastructure. By consolidating core pieces of real estate and lending processes under one roof, Rocket is positioning itself not just as a mortgage lender, but as a full-stack digital homeownership platform with the potential to recreate how Americans buy, finance, and manage their homes.
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